ENTREPRENEURIAL SPIRIT DRIVES QUALITY AT SCHOOL
AcadeMedia is Northern Europe’s largest education company and is listed on the Mid Cap list of the Nasdaq Stockholm exchange. During the year, Mellby Gård increased its holding to 21 percent of the shares. MD Marcus Strömberg sees entrepreneurship as an important driving force for quality and creativity, and he foresees continued expansion.
AcadeMedia operates 285 preschools in Sweden, Norway and Germany and 216 primary and lower-secondary schools in Sweden. It also operates adult education schools in some 150 locations in Sweden. In total, the operations comprise more than 76,000 school and preschool pupils, as well as 100,000 participants annually in adult education.
“The freedom of choice reform introduced in Sweden in the early 1990s is completely unique. It allows everyone to choose what school they want to attend regardless of how much money they have. Precisely because we have many different players within one and the same system, the school voucher system, everyone can choose what suits them. Parents choose preschool and primary and lower-secondary schools in the right location, while upper-secondary students choose schools based on their dreams for the future. AcadeMedia’s growth is attributable to many people choosing our schools, and for them to do that, we must maintain a high level of quality”, says Marcus Strömberg.
In Sweden, the debate on profits in the welfare sector culminated during the year when the Riksdag (Swedish parliament) opposed the government’s proposal to set a ceiling for how much profit a publicly funded private school or care company may make. However, it is unlikely that means the debate is over. Mellby Gård’s representative in AcadeMedia, Chairman Anders Bülow, feels the debate must still be taken seriously.
“For Mellby Gård, the fundamental view is that an education provider of this size bears a very considerable social responsibility. AcadeMedia must contribute to improvements in education. If we fail in this regard, the company will have no raison d’être and will not generate profit. But if we are to succeed in improving Sweden’s schools, the debate must be about quality rather than profit,” he says.
An important issue for many involved in the debate on Swedish welfare in general and education in particular, is what demands should be imposed on owners of companies in the welfare sector. Both Marcus Strömberg and Anders Bülow see great benefits with AcadeMedia’s current ownership.
“The company is listed on the stock exchange, which creates transparency. In addition, the main owner, Mellby Gård, maintains a long-term commitment without an exit horizon. This brings stability and credibility,” says Anders Bülow.
They both point out that, to date, AcadeMedia has never paid any dividends to shareholders. All profit after tax, which amounted to SEK 430 million for 2017/2018, is reinvested in the operations.
The past year has shown a positive trend. AcadeMedia has grown by launching 15 new preschools in Sweden, Germany and Norway, as well as seven new upper-secondary schools in Sweden. In addition, 51 upper-secondary schools and preschools have been added through acquisitions. In the adult education segment, the number of Swedish for immigrants students has increased, due not least to the substantial wave of refugee immigration in 2015.
“In preschools, we are growing in Norway and have successfully established ourselves in Germany. The Nordic preschool model, in which we combine care with learning, serves as a model internationally and I foresee continued organic growth in the future. We do not rule out establishing operations in other countries,” says Marcus Strömberg.
At the primary, lower-secondary and upper-secondary levels, the number of students will increase due to demographic trends. What proportion of these children and young people chooses one of AcadeMedia’s schools will depend on the level of quality the schools offer. Another important factor is the clarity of the offering.
“We need to be better at showing what our different schools and brands offer. A prospective upper-secondary student should be able to make a well-informed choice, and that means we must be able to demonstrate what distinguishes our various schools,” says Marcus Strömberg.
For everyone in the education sector, one challenge is the increasing lack of qualified and competent teachers. Combined with a political will to raise the attractiveness of the teaching profession, this will soon start driving up wages.